Bonds In Conversation : Ready, Get Set, Defend !

Definitely not raring to go for the first 2 trading days of markets in 2014. So much for a fresh start, we have a flat start instead.

Not seeing much in terms of price action and not finding much conviction as we head into a 6th calendar year post Lehman. We get a feeling markets are going on the defensive after a euphoric ending to 2013. What has led to this change of heart ? I wonder if it is just cosmetic or if we are really coiling up for an explosive up move which is looking quite unlikely.

This listless start is hardly surprising given the mind numbing rally we have had in the equity markets which are treading on no man’s land, historic high levels for the S&P does not really give us much to forward to which has led to this recoil as we await more good news.

Bonds are hanging by the skin of their teeth along with the 10Y UST and the bane of the 3%. Credit-wise, not many new developments and not a whole lot of consensus amongst reports on where prices are heading. And if anything, the astute investor would be looking for good unwind opportunities in thin market liquidity as we head into the Number that will set the tone for 2014 next week – the dreaded Non Farm Payrolls, after this weekend’s Fed speak at the

Singapore bond markets have been pretty quiet into the year end but should soon stir to life with the new MAS guidelines on covered bonds in Singapore, allowing banks here to issue up to 4% of total assets in the covered pool.

GDP numbers did not give the SGD dollar much cheer which suggests we will not be seeing a mad grab for SGD assets, including bonds as yet.

I have not entirely made up my mind on where the bond market is headed this year but I am sure it will not be sleepy town in Singapore. Too many skeletons in the closet especially for all the high risk issues last year and the perps coming closer to their call dates that serves to assure us that we will be in for an exciting ride.

I have to apologise that I have been extremely slack throughout this holiday season and will be preoccupied next week as my son starts his new lease of life in junior high. It feels like he managed to narrowly escape the jaws of condemnation with my choice of school for him, to my immense relief. And in all the bustle and stress of this holiday season, catching up with old friends and drinking a lot of nice wines and whiskies (some reviews coming up), I missed the little things that ushered in the new year like my budding green tomatoes.

green tomatoes

I am leaving everyone with the old format prices for, probably, the last time. We will have to work out a new format for 2014 and work on the bond directory which is getting to be rather stale as doubts about this little website grow, just like our doubts on the markets.


SGD 2013 Issues